Promotion of Competition on the Demand Side

18 Pages Posted: 24 Nov 2004

See all articles by Sean F. Ennis

Sean F. Ennis

Centre for Competition Policy, University of East Anglia; Norwich Business School, University of East Anglia

Alberto Heimler

Government of the Italian Republic (Italy) - National School of Administration

Date Written: November 18, 2004

Abstract

Much government policy focuses on improving the supply-side conditions of product rivalry, but policymakers rarely address the potential beneficial impacts of improving the demand-side conditions of rivalry. This paper suggests that focus on such demand-side elements can yield substantial benefits to consumers, especially by changing the elasticity of residual demand faced by individual firms. Small changes in switching costs, search costs, or the number of "elastic" consumers can have large beneficial impacts on equilibrium outcomes. A number of practical examples are provided that illustrate how demand-side competition can be enhanced.

Keywords: Competition, switching costs, search costs

JEL Classification: D10, D83, L14

Suggested Citation

Ennis, Sean F. and Heimler, Alberto, Promotion of Competition on the Demand Side (November 18, 2004). Available at SSRN: https://ssrn.com/abstract=622722 or http://dx.doi.org/10.2139/ssrn.622722

Sean F. Ennis

Centre for Competition Policy, University of East Anglia ( email )

United Kingdom
+44 (0)1603 591622 (Phone)

HOME PAGE: http://www.competitionpolicy.ac.uk

Norwich Business School, University of East Anglia ( email )

Norwich
NR4 7TJ
United Kingdom
+44 (0)1603 591622 (Phone)

Alberto Heimler (Contact Author)

Government of the Italian Republic (Italy) - National School of Administration ( email )

Via dei Robilant
11 - 00135 Rome
Italy
+3906 33565348 (Phone)